In contrast to the vast literature on persistent cognitive deficits in schizophrenia, much less is known about the pathophysiology leading to positive symptoms such as hallucinations. These abnormal sensory experiences often dominate the acute psychotic state. Pharmacologic treatments can alleviate positive symptoms, but treatment response is not universal and the mechanism of efficacy at the neural systems level is not well understood. The research program in this proposal builds on the model that activity in sensory systems is elevated during hallucinatory experiences, and that one important cause of this sensory overdrive is reduced top-down modulation by attentional processes. The proposed research aims to determine whether impairments in attentional modulation of sensory input are related to the severity of hallucinations in untreated first episode schizophrenia patients, and whether that disturbance is reduced by the widely used antipsychotic risperidone. Complementary fMRI and EEG approaches will be used to sensitively assess brain activity and characterize connections among neural systems supporting these processes. Pursuit of the proposed studies will not only advance knowledge in this area, but also provide a valuable framework for achieving the broader aims of the career development program. The candidate's immediate goal is to develop a career as an independent investigator in the field of neurocognitive schizophrenia research. The candidate's mentor and team of consultants (all actively collaborating with the mentor) are leading experts in sensory processing in schizophrenia, cognitive neuroscience methods, behavioral pharmacology, and clinical trials, and will guide the candidate's learning and study development efforts. The candidate will focus additional specific training activities such as coursework, readings, workshops, and visits to consultants' labs to achieve expertise in: 1) the neuroscience of top down control over sensory processing, 2) conducting clinical trials with schizophrenia patients to assess neurocognitive effects of treatments, and 3) modern methods of in vivo neural system measurement appropriate for clinical research. Research and training activities will be carried out within the University of Illinois' Center for Cognitive Medicine, a multi-disciplinary research unit directed by the candidate's mentor, whose ongoing first episode psychosis research program and other schizophrenia studies utilizing onsite fMRI and EEG provide a structure for the candidate's proposed studies. This career development award will enable the candidate's long term goals of contributing to the understanding of the pathophysiology of psychotic symptoms in schizophrenia and informing new treatment development and evaluation efforts.